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Top Obama advisers met late Wednesday with Senate Republicans in hopes of defusing a messy fight over bank bailout funds
Reuters

The current program of extended unemployment benefits will be authorized through the end of 2009, and Pelosi is pressing for what could be up to a $50 increase in the weekly benefit. An estimated $20 billion is budgeted for increased food stamp and nutrition spending, and about $35 billion is allocated to preserve some health insurance coverage for those who have lost their jobs.

Many of these expenditures are unprecedented in scale. It’s estimated that total federal aid to education could increase by as much as $140 billion over two years, virtually doubling the annual rate today.

But the same investments could help Obama navigate between the Wall Street vs. Main Street politics that so dominated last fall’s debate over the financial rescue package. Congress was urged then by Treasury Secretary Henry Paulson to make the $700 billion commitment to avert a credit meltdown, but voters were angered by the cost and the failure to do more to help homeowners deal with the threat of foreclosure.

Thirty-four Senate Republicans, led by Minority Leader Mitch McConnell of Kentucky, were pivotal to passing the bailout bill in October, but the mood has soured dramatically since November’s elections.

After a tough campaign in Kentucky, McConnell returned to Washington in a much more skeptical frame of mind. In a speech Wednesday on the Senate floor, he warned he would “find it exceedingly difficult to support additional taxpayer funds without serious assurances from the incoming administration that the taxpayers will be protected.”

Those remarks set the stage for Obama to send his senior economic adviser, Lawrence Summers, as well as the incoming White House chief of staff, Rahm Emanuel, to meet with Senate Republicans in the late afternoon. In the time remaining before the floor vote, a key issue will be how far Obama will go to assure Republicans that he won’t use the Treasury funds as a tool for industrial policy.

Many, like McConnell, were upset when the outgoing Bush administration reversed itself and tapped Treasury funds to help Detroit automakers facing bankruptcy. Sen. Judd Gregg (R-N.H.) said Bush’s decision opened a Pandora’s box for conservatives. Prodded by Gregg, Summers and Emanuel emphasized that Obama had no desire to expand Treasury’s commitment to new industries.

“It hopefully gave people some comfort,” said Gregg, who has been a valuable ally for Obama given his standing on fiscal issues. “They made very clear that they aren’t going to use [the Treasury] money outside the financial industry except for what’s committed to auto and maybe something additional under a major reorganization plan for auto.”

Summers and Emanuel left without comment, but McConnell said he would also want something beyond closed-door assurances from the administration. And a second decisive vote could come from Arizona Republican Sen. John McCain, Obama’s defeated presidential rival.

Much as this is a first test for Obama, it could also be a first test of that relationship with McCain. The Arizonan’s office refused to comment on his stand, but Gregg said hopefully of McCain: “When I last asked him, he said he was still listening.”

Thirty-four Senate Republicans, led by Minority Leader Mitch McConnell of Kentucky, were pivotal to passing the bailout bill in October, but the mood has soured dramatically since November’s elections.

The mood has always been sour from the public. It just takes these D.C. dirtballs awhile to get things through their thick skulls. When we voiced opposition to this in the fall, Congress sneered at us and basically told us that we didn't know what we were talking about and that this had to be done or the country would shut down. Now that it's turned into a fiasco "the mood has soured".

TeamPolitico: Jan. 14, 2009 - 8:28 PM EST

But given the economy’s condition, Obama has warned that the jobless rate will still grow in the coming months, and

he's full of crap. Is anyone going to call this con-man on any of this? The economic calamity is being blown out of proportion and exaggerated and it's going to improve on it's own. The only "urgency" is Obama's need to get legislation passed so when it does turn around he can claim credit for it. And since 99% of Obama voters know next to nothing economics they'll believe it.

What ever plan President Elect Obama puts forward has one basic problem as I see it for now or at least since Congress has started back in session and that is: 1). We have some of the best academic minds and political leaders on the Transition Team working to fix the problems started by the Regan Administration and which are now festering at the end of the Bush Administration 2). The aforementioned people (Transition Team) are submitting excellent plans and concepts for a revitalized America to a Congress which authored, sanctioned or aided our problems we are in today.

What ever plan President Elect Obama puts forward has one basic problem as I see it for now or at least since Congress has started back in session and that is: 1). We have some of the best academic minds and political leaders on the Transition Team working to fix the problems started by the Regan Administration and which are now festering at the end of the Bush Administration 2). The aforementioned people (Transition Team) are submitting excellent plans and concepts for a revitalized America to a Congress which authored, sanctioned or aided our problems we are in today.

You're trying to sound intelligent but you're entire post is incoherent and you're a tool. You do not need capital letters when referring to the transition team as it is not a proper name. It is probably filled with "the best academic minds" who have never run a business successfully. I imagine the trasition team suits Obama right down to the ground since they have accomplishing nothing in common. I'm not even going to bother asking about the "problems" started by Reagan because considering the fact that you can't even spell his freakin name it would probably be a really stupid response.

I was ok with TARP, HOWEVER, there is not much oversight on the tax payer monies that are going to the banks. As a result.....banks are still hording and unwilling to release credit to the folks that need it while they open up their hands to receive funds from the gov't.

It's a matter of time before propping up the system and committing the ultimate gov't step in comes in and bites us in the arse. We are propping up our system for now, and I suspect it will haunt us in about 2010. WE will have a small stimulus, however the come to Jesus will still occur as one can never seem to escape consequences from decisions we make today.

Obama's administration will make things worse than they are and we will eventually have another GOP president in 2012. That's my analysis.

While this is an emergency, how (and when) will we know that it is over? And how will the deficit be reduced? I support Federal aid to State and local government but I hope that the legislation includes a mechanism to withdraw this support and a commitment to repay the debt incurred - just as there should be a commitment to repay the other bailouts.

No one knows how to even begin to measure the purported effect of these handouts, Bush and Obama have failed to explain what purposes they may be used for, Congress has failed to place any meaningful oversight in place, and economists are by no means in agreement that this is the right thing to do without further transparency. Why are these folks trying to slip financial firms all this money under cover of a lame duck and a newbie who still can only speak in generalities and urge us to hope?

Obama keeps saying only government can solve this problem. I think he's right. He and all those in government should solve this problem by providing their own money for the bail out. If that makes them less wealthy well, join the rest of us.

he's full of crap. Is anyone going to call this con-man on any of this? The economic calamity is being blown out of proportion and exaggerated and it's going to improve on it's own. The only "urgency" is Obama's need to get legislation passed so when it does turn around he can claim credit for it. And since 99% of Obama voters know next to nothing economics they'll believe it.

Name calling is poor form, Dread. It makes you seem angry - never a good thing. No one listens to angry folks, but I'll bet you know that already. More importantly, it detracts from the substantive content of your posting. Let's look at that: 1) the economy is going to heal itself and 2) "99% of Obama voters know next to nothing [about] economics...." Well, you are probably right about the economy; it would heal itself in a decade or two after another 2 or 3 million jobs are lost. No big deal, the entire economy collapses and comes back to life just in time for our grandchildren to buy a new Honda. Maybe 15% of the workforce would be unemployed? 20%? Tough, huh? Real men don't whine about not being able to feed their families, do they? Just don't interfere with those markets, buddy. Oooops! Forgot. There are no more markets. No more Wall Street. No more lending institutions. No more customers (they're out of work and out of credit). Better rethink that one. Now let's look at the arithmetic. You note that 99% the Obama voters know nothing about economics and would thus believe that Obama might deserve credit for a turnaround in the economy. How about the 47% of McCain voters? What percent of that group understands economics? All? Half? In any case, would these poor, ignorant McCain voters also believe that Obama deserved credit? Of course, it doesn't matter. 99% of 53% is 52.47%, which is a majority of voters. I guess we are just a nation of idiots, not a genius like you, blessed with total understanding of everything. Pity us, Dread. I hope you run in '12. Save us. Talk dirty to me, Dread.

Let's call this what it really is - Generational theft. The Generational Theft Act part I passed two months ago. The Generational Theft Act part II is coming soon to future generations.

Now add the largest ponzi scheme of all - entitlements.

My apology to the future generations of americans.

TennVol: And the worst is yet to come. Bernake said in a speech today that he wanted to create a "Bad Bank" to buy up all of the toxic bank debt. This Bad Bank will now be owned by the American Taxpayer. Generations of American people will be paying abhorrent taxes for this idiocy that will create a Country of serfs.

Good Article from Daily Reckoning that responds to this:

"Bernanke also expressed support for the idea of creating a so-called bad bank that would allow the government to buy financial assets in exchange for cash or equity."

Here is where we laughed so hard we thought we might damage our midriff.

Create a 'bad bank?' Is he kidding? The world's full of bad banks already - banks that did just what Bernanke is proposing to do; they bought financial assets, notably mortgage market derivatives, for cash. Now, they turn to the taxpayer, desperate for a handout to keep them from going under.

And the baddest bank of all? Next to the Central Bank of Zimbabwe it's the U.S. Fed. What's it doing? It's buying trash and paying cash. In this way, the mistakes of rich bankers are transferred to the people…via the people's bank - the Fed. Of course, the people don't know what's going on. And they won't notice either when the Fed eventually unloads these toxic assets - in the dark of night.

obama is trying to steal from our unborm great grand children. oh II guess a liberal doesn't care about the unborn

Considering that bambi has already publicly announced he would support his daughters in the killing of his grandchildren (if they were inconveniently timed), I think you are very safe in making the comment you have made.

Since he will have killed the unborn parents of his great grandchildren, he really isn't concerned about that angle at all.

Tom A : you sound very professorial with your commentary, "the best minds blah, blah, blah:. Do you have memory loss? Do you recollect, even vaguely that there was a 2 term Clinton In between Reagan and Bush?? It is ignorant dumbbells like you who make solving these national problem so difficult. Wake up to the real world !!!

I had a dream last night. Looking back into the past, Al Gore had actually won the 2000 election; even though he had the majority of the votes. We had an 8 figure surplus and he actually built upon that because as we know, generally the rich get richer. Gore took heed in the warnings that said terrorists were planning to use passenger jets as missiles- soon! He would have followed the advice and acted because his predecessor had been attacked by Bin Laden 2 months into his new term. We would not have spent billions on a senseless war, but would have invested in our countries future and if I may have this one conjecture: he would have regulated Wall St. Gore is a southerner and would have cared about New Orleans and acted as a leader not a decider to help the have-nots. Our American world could have been better. We would still have our honor, which we have since lost. We would not have dreamed of torture and taking pictures of it to show the world! We would have, in the words of Winston Churchill arrived at the "Broad, sunlit uplands.? AaaaaYeeesss to dream the impossible dream. Now look at us. Do we actually want to vote in more Republicans? That is insanity.

Bailouts are not the answer. The toxic debts are much larger than our capability of repaying them. It's money thrown down a rat hole. Bankruptcy re-organization is the answer. Here are the policies that are necessary to prevent the destruction of our nation. Learn more at www.larouchepac.com